JOHANNESBURG, South Africa--July 29, 2004-- Sappi Limited Results highlights EPS of 18 US cents for quarter Results enhanced by plantation fair value and taxation credits Cash flow improves Southern African businesses' margins squeezed by Rand strength Global demand for coated paper recovering Commenting on the results, Sappi Chief Executive Officer Jonathan Leslie, said: "We have seen continued demand growth in our major markets for coated fine paper during the quarter. However, price levels in the quarter remained at cyclical lows. "The European price increases in April were largely unrealised. The June price increase in North America has been successful for non-contract business and is being phased in on the rest as price agreements expire. We have subsequently announced further increases in Europe and North America. "Despite strong sales volumes, the South African businesses continue to face margin pressure due to the strong Rand. Forest Products results were enhanced by the plantation fair value adjustment. "Strong cash generation was again a feature of our results. Cash generated by operations increased to US$154 million in the quarter compared to US$122 million in the equivalent quarter last year." Looking forward, Leslie said: "We are experiencing increased demand for coated paper worldwide and particularly in our major markets of Europe and North America. As price levels for coated paper remain at low levels, achieving higher prices remains key to improving our profitability. "We are clearly seeing an overall improvement in our business environment and expect some improvement in earnings per share in the fourth financial quarter; however, we will not achieve the full effect of the turnaround in our North American business until next year." The full results announcement is available at www.sappi.com.